Federal tax hikes on banks and insurers risk causing broader economic damage – Globe and Mail Op-Ed
Taxes are a necessary evil. Necessary, because we must fund government services. Evil, because they do damage beyond the cost to those who pay them – discouraging work and saving, misallocating where our scarce resources go, and encouraging underground activity. The federal government’s coming levies on banks and insurers – a corporate income surtax and the “Canada Recovery Dividend” – don’t even qualify as “necessary.”
These taxes were part of the Liberal campaign platform for last year’s federal election. The platform committed to raising the corporate income tax rate on bank and insurer profits above $1-billion from the 15 per cent other businesses pay to 18 per cent. It also proposed the Canada Recovery Dividend: a…
Pigeon, Fulton – Building Greater Resilience in Canada’s Big Credit Unions
To: Canadian Finance System Watchers From: Marc-André Pigeon and Murray Fulton Date: September 16, 2022 Re: Building Greater Resilience in Canada’s Big Credit Unions Even as the 2007-2009 financial crisis recedes from memory, financial sector policymakers continue to roll out a policy agenda built around what is believed to be a key cause of the financial crisis, namely […] How high should interest rates go and how fast? – Financial Post Op-Ed
The Bank of Canada continued its tightening cycle last week by announcing a 75-basis-point increase in its overnight rate target. That target is now above the top end of the Bank’s estimate of the “neutral rate” of two to three per cent. But how fast will the rate go from here?
The neutral rate is the rate the Bank thinks would be appropriate for an economy producing at full capacity, with inflation running at two percent. Most economists and market-watchers believe the overnight rate needs to go beyond neutral in order to fight inflation. Despite a one-month drop in the year-over-year increase in the CPI from 8.1 per cent in June to 7.6 per cent in July, inflation is a long way above the top end of the one-to-three per cent…
Aiming Higher: How to Build Greater Resiliency for Large Credit Unions in Canada
Credit unions represent an important part of the Canadian banking sector and, therefore, the Canadian economy. Outside of Quebec, at the end of 2021 credit unions held almost $280 billion in assets, representing about 7 percent of banking sector assets. While improving corporate governance has been part of the reform agenda for federal policymakers and […] Ed Devlin on BNN – The hidden sting in removing stimulus: A tide of new debt
Ed Devlin, Senior Fellow at the C.D. Howe Institute and founder of Devlin Capital, joined BNN Bloomberg and discussed the Bank of Canada being in uncharted territory as it implements quantitative tightening – the shrinking of its balance sheet – while also tightening interest rates. He advised the Bank to be flexible if a flood of new government bonds ends up swamping Canada’s illiquid market.
Ambler, Kronick – Reintegrate Money into Monetary Policy Analysis
From: Steve Ambler and Jeremy M. Kronick To: Bank of Canada Governing Council Date: July 5, 2022 Re: Reintegrate Money into Monetary Policy Analysis Headline inflation, which has reached 7.7 percent, has become decidedly unsettled. Until the 1980s, most economists believed there was a significant relationship between money and inflation in both the short and long runs. However, […] Jeremy Kronick on BNN – BoC’s policy rate must go much farther to get inflation back down
Jeremy Kronick, Associate Director of Research at the C.D. Howe Institute, joined BNN Bloomberg to explain how stimulus spending during the pandemic has created an overhang in the economy and prices have to play catch-up with the money now sloshing around in the system. Kronick says the slowdown in the rates of money growth and in the housing market are positive signs for taming inflation.
Jackson, Kumar, Asghar – University Endowments Should Walk the Talk
To: Canada’s University Foundation Boards From: Catherine Jackson, Abhishek Kumar and Ramisha Asghar Date: June 8, 2022 Re: University Endowments Should Walk the Talk Canadian universities are world renowned for their leadership in research and education. Many undertake research efforts and teach students about the risks and opportunities associated with climate change. Most have also embraced a transition to […] Cash in the bank: Cutting through the noise on digital currencies – Globe and Mail Op-Ed
In the debate over whether the Bank of Canada should issue a central bank digital currency, it is tempting to take a black-and-white perspective. But, the truth is subtler. There exists a spectrum of CBDC design possibilities and a proper evaluation of the different options is necessary.
As it turns out, a token-based CBDC – one that mimics cash quite closely – would respect privacy, create an environment for new forms of private money to grow and wouldn’t disrupt the functioning and stability of our financial system.
To understand why this option is optimal, it is first important to distinguish between public and private money. Public money consists of the physical notes and coins in circulation – the cash in your wallet…
William B.P. Robson on Power & Politics – Poilievre Targets BoC Chief
Conservative Leadership candidate Pierre Poilievre is facing scrutiny over his claims that he would fire the Bank of Canada governor should he become Prime Minister. William B.P. Robson joins Power & Politics to discuss.
William White – The Weaponization of Finance and the Future of the International Monetary System
From: William White To: International Currency Watchers Date: May 10, 2021 Re: The Weaponization of Finance and the Future of the International Monetary System The recent use of financial sanctions by the US, against the central bank of Russia, initially raised fears that other countries might try to protect themselves by reducing sharply their reserve holdings of US dollars. […] Put to the Test: Ranking Canada’s Universities on Their Climate Change and Endowment Activities
Canadian universities are world renowned for their leadership in research and education. Many Canadian universities undertake research efforts and teach students about the risks and opportunities associated with climate change. Most have also embraced a transition to lower the carbon footprint across their operations. However, universities could do more to align their investment philosophies with […]